Part Of Cutter Tower Site Placed On Auction Block

Tower Site Parcels On Block

Four land parcels in downtown Hartford where developers once wanted to build New England's tallest skyscraper are being auctioned by the city to cover about $3 million in back taxes.

The tax foreclosure on the parcels -- part of the site of the ill-fated Cutter Financial Center -- is scheduled in Hartford Superior Court at noon Saturday, nearly six years after the Hartford City Council approved plans for its construction.

The city and a group of banks that loaned the project's former developers nearly $20 million each filed foreclosure lawsuits to seize the properties.

But it is the city's foreclosure action that is proceeding first, which means Hartford taxpayers will either collect $3 million from the sale or gain title to two vacant lots on Trumbull and Lewis streets and a pair of vacant office buildings on Pearl Street that would have been razed to make way for a 59-story tower.

"This is probably the largest foreclosure auction in the history of the Hartford Superior Court," said Hartford lawyer Jeffrey Steinberg, a foreclosure specialist appointed by the court to oversee the auction.

"My estimate is that there's roughly $66 million of debts on the four parcels," he said.

Any sale amount over $3 million is earmarked to repay a group of banks, led by Fleet National Bank in Providence, which hold a $19.5 million mortgage on the properties.

Other than the city, which is certain to bid to protect its interest, Steinberg said bidder turnout for Saturday's auction is expected to be light.

With downtown office vacany rates running at more than 20 percent, new construction on the parcel is unlikely, experts say, and finding tenants for the existing buildings would be difficult.

"We've been contacted by about 10 potential bidders. But we're very disappointed in the initial interest," he said. "We thought there would be more interest in the properties."

The bank group will not bid on the parcels, according to Martin

Geitz, executive vice president in charge of commercial real estate lending for Hartford-based Fleet Bank N.A., one of the loan participants.

The group decided that the tax liability to the city was higher than the property value, Geitz said.

He said the bank group has exhausted all attempts to collect the loan and the auction is the group's last chance to get any of its money back.

Experts say the properties would perhaps appeal only to speculators.

"In order to buy them, someone has to have the confidence they can rehab and then lease the space," said William Farley, president of The Farley Co./Oncor International in Hartford.

The properties are all owned by the Cutter Lewis Street Associates Limited Partnership, which was formed to assemble the parcels for the building site.

He attributed that limited appeal to the difficult economy and the nature of the properties.

Being foreclosed are properties at 101 Pearl, whose lone tenant is a Fleet Bank branch on the ground floor, and 111 Pearl, an empty office building. Geitz said Fleet is already looking for a new branch site downtown.

The other two parcels include a historic office building at 92-94 Trumbull St. and a vacant plot at 37-41 Lewis St., which is now leased to Laz Parking for use as a parking lot.

Steinberg said bids would be accepted for all four properties in a package deal and as separate parcels.

Another assortment of parcels comprising the former Cutter Lewis project is scheduled to be foreclosed on in August, he said.

The proposed site of the 59-story Cutter Financial Center was made up of 11 downtown parcels, bounded by Trumbull, Lewis and Pearl streets, acquired in the mid-1980s. Some of the parcels were bought for what was a record amount at the time.

United Bank & Trust Co. at one time held the mortgage on the site. United, which was later acquired by Fleet Financial Group, had planned to move its headquarters into the building from its old quarters at 101 Pearl.

The city in 1987 approved development of the tower, which would have cost an estimated $350 million to build based on its original design to incorporate office space and condominiums.

The Cutter building was to have topped by 88 feet Boston's John Hancock building, New England's tallest tower.

Construction was to have begun in early 1988, a time when New England's real estate boom had already peaked, with occupancy starting in 1992.

But almost from the start the proposed skyscraper and its former developers -- Cutter Realty Corp. of Stamford and Dallas-based Lincoln Properties -- were mired in controversy.

No listing for a Cutter Realty office in Stamford could be found Wednesday. Anthony F. Cutaia, Cutter's chairman, also could not be located for comment.

Lincoln Properties officials did not respond to requests for comment.

The owner of a downtown restaurant adjacent to the proposed site tried unsuccessfully to overturn the city's approval in 1987.

In 1989, the original contractor for the project filed liens against the downtown property to collect $550,000 for work

allegedly done on the site during a two-year period.

A year later, Cutter asked the city to allow it to redesign the project to eliminate 12 floors of proposed condominiums because of difficulty attracting lenders to finance a dual office-housing tower.

The developers also fell behind by more than $360,000 on their 1989 taxes on the downtown parcels